I don't disagree with too much of this. The cost is hefty, and while college athletic departments are "not for profit" in name only, they were FULLY committed to playing right up until the kids organized and demanded health and safety protocols that actually kept them safe.
The universities and athletic departments were fine until they realized they needed to take this virus seriously and couldn't skate by without the public pressure of actually having to do what is best for their student athletes.
MLB, NFL and every other league pays player salaries. College Football, especially at the conference and NCAA level, have made billions in profits while not having to pay the student athletes a dime of it.
The Big Ten alone dished out $55 million in revenue to each school from their rights deal. Am I really supposed to believe that 50,000 tests and added protocols for ONE YEAR, on an immensely profitable business, is not feasible?
I'm sorry, I just don't buy that.
Well, yes.
So here's something that might shock most people in here. OSU's athletic department LOST money in 2018-19. Yes, despite making over $200 million in revenue, they spent more than they earned. This is the catch-22 for the college football and basketball programs across the country and the athletes calling for pay.
While they might be making a lot of money, they're re-investing literally all of it into coaching, staff, recruiting, travel, and building world-class facilities that allow the player to evolve as a student-athlete and the sport to generate money. Sports are a marketing tool for a university, and most lose money overall on sports. OSU didn't lose much, but it's still hard to believe that an athletics program that brings in as much money as OSU would still lose money.
This further illustrates the problems even for other Big 10 schools that don't bring in the same kind of money as OSU.
Ohio State's required Equity in Athletics Distributions Act report to the NCAA showed a $10 million deficit between revenue and expenses. The school says that is due to an interpretation of how funds are accounted only on that report.
www.cleveland.com
On the EADA report, Ohio State recorded income of $210.5 million and expenses of $220.5 million. However, OSU said that does not include $10.4 million in revenue from Buckeye Club donations and other gifts related to debt service and capital projects.
The money spent on projects such as the Covelli-Jennings Center, the Schumaker Student Athlete Development Complex and the Woody Hayes Athletic Center renovation was held in what OSU senior associate athletic director for finance Joe Odoguardi called “plant funds.” He said OSU’s external auditors’ interpretation of the EADA report was that those funds should not be included as income for that year.
These are the athletic numbers from OSU for 18-19 from USA Today:
sports.usatoday.com
Ticket Sales: $59,847,907
Contributions: $29,681,048
Rights/Licensing: $93,919,737 (TV Money, apparel, etc.)
School Funds: $41,472
Other: $27,058,075
Total Revenue: $210,548,239
Ohio State athletic director Gene Smith said social distancing requirements might result in a limited capacity of 20,000-50,000 this fall. How would OSU handle that loss of revenue?
www.cleveland.com
What football means for the bottom line
Smith said in April that Ohio State athletics expected to end the fiscal year with about $10.2 million in reserves. Those reserves, even if OSU chose to wipe them out all at once, would not cover the operational deficit of a season with drastically reduced football ticket sales — let alone no attendance at all.
Looking again at the EADA submissions, the football program made between $50.55-$59.35 million in ticket revenue over the past three seasons. Over that span, football tickets accounted for roughly 51% of all football revenue and almost 27% of the entire athletic department’s revenue.
Smith said Ohio State has gamed out scenarios, based on social distancing recommendations, limiting football attendance to 20,000-22,000 this fall. He later added that an easing of those guidelines could allow up to 40,000-50,000 fans.
Football games played without fans or with reduced crowds could still bring revenue to OSU through media broadcast rights. Football accounted for $34 million of the athletic department’s $45.6 million in media rights revenue for 2019-20.
However, take most or all of that income from both sources away and the hit to OSU’s bottom line is significant.
“I think Ohio State is better positioned than the majority of the schools, but we still obviously have some major concerns,” said Brian Turner, an associate professor of sports management at Ohio State who is beginning his second stint on the school’s athletic council.
So take away at least $55-60 mill from the athletic budget with no fans right off the top. That means just without ticket sales they're operating at a $60 million loss. I would have to guess that given the current circumstances, apparel sales take a massive hit with no fans in the stadium and the economic state of the country.
If you want the greater culprits, look no further than the coaching and support staffs:
"The $39,295,656 spent on coaches’ salaries last year might also be locked in — Smith said at this point the school is also resisting cutting coach salaries, as Michigan and others have done recently — another $38,108,511 went to administrative and support staff that could conceivably shrink after expanding in recent years."
So, $77,000,000 on coaches and support staff in athletics, a number that won't change this year according to Smith.
There's a lot of other factors in play for the 2020 fiscal year as well. This was OSU's 2020 budget:
Read through it if you'd like. It'd shed a great deal of light on why these Presidents are in such a difficult situation.
The main point being, OSU's projected revenue was $7.5 Billion and projected expense was $7 Billion. Everyone leaves wiggle room in their budget, but it still has to be spent by the end of the year. Keep in mind, this is not only reflecting the Columbus campus, but this includes the total budget for all four regional campuses as well.
I have not seen numbers for enrollment yet, but I would have to assume out-of-state and international numbers will take a big hit, which will result in a big reduction of tuition dollars.
The state of Ohio contributes money to every public university in the state. In May they had to trim their budget and part of that involved contributions to universities.
All public universities and community colleges in the state of Ohio will take a 3.8% budget cut for the remainder of the fiscal year, the Ohio Department of Higher Education announced Wednesday morning.
www.wcpo.com
"The Ohio State University was originally slated to receive $392.3 million from the state and will now receive about $377 million"
It doesn't totally work like this, but technically speaking, the loss of money from the state and the likely drop in enrollment would probably be enough to shut down at the very least two if not all four of the regional branches.